New Qualcomm CEO Faces China Shakedown

China wants to cut down its costs for Qualcomm's mobile technology dominance, the first challenge to be faced by new CEO Steve Mollenkopf.

NEW YORK (TheStreet) -- Qualcomm (QCOM), long a no-brainer on technology buy lists, may be about to become a battleground stock.

The company's chips and licensing fees dominate the mobile phone market. They're a must in both networking gear and phones. This has allowed it to grow its top line by about 30% per year since 2010, with profits that have more than doubled since that time and a dividend that has reached 35 cents per quarter.

Qualcomm shares were trading down 68 cents, or 0.9%, Wednesday morning at $75.60.

The stock's price-to-earnings ratio is a rich 20.65, and the rising dividend still yields just 1.85%. Contrast that with Intel's (INTC) 13.1 P/E and 3.63% yield.

Qualcomm's price jumped on its earnings report last month, when it reported revenue of $6.62 billion, up 10% from a year earlier, and adjusted earnings per share of $1.26, which topped analysts expectations by 8 cents.

The company further boosted its dominant mobile patent position by buying 1,400 patents from Hewlett-Packard (HPQ), including those related to the webOS mobile operating system.

But Qualcomm starts breaking in a new CEO next month just as China moves to shake down the company over its licensing fees and dominance of the communication chip market. It has also just announced a product failure, less than one month after a product launch.

Is Qualcomm losing its grip?

Few think Steve Mollenkopf, 44, isn't up to the CEO challenge. He was reportedly under consideration as Microsoft (MSFT) CEO last year (the job that eventually went to Satya Nadella) when Qualcomm acted like a college whose offensive coordinator was flirting with a bigger school and agreed to let him replace Paul Jacobs, 51, son of co-founder Irwin Jacobs.

Paul Jacobs is staying on as executive chairman, and will reportedly "guide the development of new technology." Think of it as bumping the old coach up to athletic director. Jacobs was also one of three Qualcomm insiders to make a major sale of his company's stock last month, however, which may add to bearish pressure.